7 min

Tags in this article

, , , ,

Workday is on the rise in the ERP market. The company’s financial results show this time and time again. The quarterly figures often show growths of tens of percents compared to the previous year. It has to be said that the average ERP supplier is growing, but that this is often not as fast as Workday. A great achievement. And the company still hasn’t reached its ceiling by a long shot, as it turns out when we speak to Country Manager Benelux Erik ten Bruggencate.

The ERP market has traditionally been set up in such a way that a number of players are very large. SAP and Oracle have actually always belonged to this group, and today, with their cloud ERP and on-premise ERP, they are still a preferred choice for many companies. When the cloud came into being, however, startups also began to design ERP systems that are delivered exclusively from the cloud. That may have been crazy at the time, but it has now become a logical choice for many companies. Good examples are NetSuite and Workday. These ERP suppliers are doing well on the market today and have grown into major players.

The competition naturally sees that cloud-only ERP providers are doing well. Oracle, for example, took over NetSuite for billions. And on Workday, Oracle executives have repeatedly made statements that show that they take the company very seriously. This may be logical in view of Workday’s focus on Human Resources, finance and planning: Oracle is also active in these areas.

Each user on one version makes customization less desirable

At Workday, people say that they mainly rely on their own strengths. This is reflected in various components, but especially in the technology developed. The ERP system has managed to eliminate a complex part of a normal process. Normally, an implementation process starts with a bare ERP system, after which a company, together with consultants, looks at which functionalities need to be built-in. Workday tackles this differently by not supporting customization. Instead, every customer ends up on the same version. This version must basically offer all the functionalities that a user might initially wish for.

However, all kinds of things remain relevant to take into account during the implementation process. This could include mapping out the IT systems that need to be linked to Workday, and then linking them to it. However, future Workday users also need to think carefully about which business processes will be included in the system.

On the other hand, the Workday approach will certainly save companies time and money. Normally, there is a lot of time involved in the various parts of an implementation process and in building the system to measure. Therefore, Workday makes the process a little simpler. As a result, the average implementation time is approximately seven months. Very large and complex implementations can exceed this average.

Building your own functionality is only supported to a limited extent

According to Ten Bruggencate, the abandonment of customization demonstrates the strength of the ERP system. Workday has exactly the functionalities that almost every professional asks for, says the Country Manager. Workday has achieved this by focusing its software on HR, finance and planning. Because of this limited focus, the company knows a lot about the markets, which during new releases should lead to the functionalities that the market in question is asking for at that moment. Ten Bruggencate indicates that, for this reason, there is a standard that is usually of sufficient use to users.

Of course, Workday does offer users the possibility to set up the platform to their own taste. To this end, it has tools available with which users can develop applications. The App Creator, for example, provides a low code environment in which users can create apps using drag-and-drop. In addition, certain parts of the platform have been opened up to developers so that they can build applications themselves by coding. In both cases, however, the fact that building functionality does not go as far as traditional ERP systems must be taken into account, as this clashes with Workday’s vision. The ERP vendor wants users to stay as close to the standard as possible so that they can learn how to use the Workday software. The users then adapt themselves to Workday, which, according to Ten Bruggencate, provides them with the functionalities that they usually want. In that case they would no longer need a fully personalized system.

Cloud vision must match with customer

Workday also wants to make no misunderstandings in this area. The cloud vision has been set out, and this includes certain concessions. There is no way to run the ERP system on-premise. Potential customers sometimes ask for this after an ERP consultant or advisor has looked at the business situation. In that case, a number of ERP systems are recommended, whereby they consider the possibility on-premise. Workday tries to convince such customers of cloud ERP, but not at any cost. Ten Bruggencate says that potential customers should match what Workday does. That is why belief in cloud products is important: Workday really sees the future in the cloud.

Workday takes steps to look modern

Our experience with Workday shows that the software has at least the modern functionalities of an ERP system. The fact that the company was founded about 14 years ago undoubtedly contributes to this. At the time, the founders of Workday already thought that software delivered from the cloud would be widely used. When developing the software, they took this into account, which now makes the ERP system look basically modern.

However, as time went by, the ERP market as a whole also became more mature, which led to the introduction and expansion of certain functionalities. For example, most ERP vendors made the addition and expansion of their Business Intelligence (BI) capabilities a top priority. This resulted in a true takeover series in the BI field, as it is difficult to develop BI capabilities for your own platform. Workday also focused on further expanding its analytics capabilities, resulting in the acquisition of Platfora. Platfora is now fully integrated into Workday, which has led to the so-called Prism Analytics. With Prism Analytics, companies can apply known BI techniques. All types of data, whether they come from the Workday system or another system, can be prepared and analyzed.

With these kinds of steps, Workday shows that it remains relevant in the market. The extent to which the ERP system as a whole really feels new cannot be fully assessed because of our limited experience. However, Ten Bruggencate assures us that we do not have to worry about this, referring to the half-yearly updates that introduce market-oriented functionalities. In addition, Workday’s high ranking in Gartner Magic Quadrant reports and customer satisfaction figures show that the software would be innovative.

Core values at the basis of the total message

According to Ten Bruggencate, this high level of customer satisfaction is due to several aspects that Workday takes into account. The culture of Workday would be different from that of the competition. For example, it has been determined that it is only satisfied with a minimum of 95% customer satisfaction. Workday is able to achieve this because, for example, it responds directly to customers’ problems. For this purpose, the company has reserved capital and set up separate teams so that everything can be arranged as quickly as possible.

Ten Bruggencate states that this form of customer service is one of the core values that form the basis of Workday’s vision. The cloud ERP system may be basic, but without the other core values, the software is not complete. In this way, Workday also sees its own employees as an important factor in the possible success that can be achieved further. An open company culture must be created, in which the staff are open and honest towards each other, but also towards the customers. This corporate culture also includes hard work and room for social and corporate events in order to promote pleasure. Behind pleasure lies the idea that a happy employee is a good employee who conveys positive energy to the customers.

Ambitious ERP supplier sets the bar high

A final core value of Workday that Ten Bruggencate cites is profitability. In the past, the ERP supplier has already made firm statements about the direction in which it wants to take this. By 2025 there must be a turnover of 10 billion dollars, which is equivalent to some 9 billion euros. In the previous fiscal year, there was a turnover of approximately 2 billion dollars; this year, the figure for this year is 3 billion dollars. That USD 10 billion would not be so bad, by the way, given the current growth figures of around 30%, but that growth will have to continue. Another way of achieving the USD 10 billion would be to take over companies. The past shows that Workday is regularly prepared to do this: more than ten acquisitions have already been completed.

However, if Workday is to achieve its 2025 revenue target, it would also help if it were able to tempt companies to switch from their current systems to Workday. At the moment, organizations are most likely to run Oracle HR systems. The question is, however, how many organizations would really like to switch from their current system to Workday. Then they run into a lot of complexity, and it remains to be seen how long they will be stuck with a difficult system during the migration.

Ten Bruggencate, however, mainly points to the potential of the Workday software when striving for 10 billion dollars. According to him, Workday currently holds 20 percent of the market. In the 14 years that it has been in existence, that’s quite good, but more is always possible. We agree with him; Workday shows that its software has potential. Therefore, we are curious about what the future holds.